Correlation Between Exelon and Prudential Utility

Can any of the company-specific risk be diversified away by investing in both Exelon and Prudential Utility at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Exelon and Prudential Utility into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exelon and Prudential Utility Fund, you can compare the effects of market volatilities on Exelon and Prudential Utility and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Exelon with a short position of Prudential Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exelon and Prudential Utility.

Diversification Opportunities for Exelon and Prudential Utility

0.0

Correlation Coefficient

Exelon  Prudential Utility

Pay attention - limited upside

The 3 months correlation between Exelon and Prudential is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exelon and Prudential Utility Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Utility and Exelon is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Exelon are associated (or correlated) with Prudential Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Utility has no effect on the direction of Exelon i.e., Exelon and Prudential Utility go up and down completely randomly.

Pair Corralation between Exelon and Prudential Utility

Considering the 90-day investment horizon Exelon is expected to under-perform the Prudential Utility. In addition to that, Exelon is 1.35 times more volatile than Prudential Utility Fund. It trades about -0.02 of its total potential returns per unit of risk. Prudential Utility Fund is currently generating about 0.15 per unit of volatility. If you would invest  1,526  in Prudential Utility Fund on May 4, 2025 and sell it today you would earn a total of  120.00  from holding Prudential Utility Fund or generate 7.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Exelon  vs.  Prudential Utility Fund

Exelon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exelon has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Exelon is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Prudential Utility

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Utility Fund are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Prudential Utility may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Exelon and Prudential Utility

The main advantage of trading using opposite Exelon and Prudential Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exelon position performs unexpectedly, Prudential Utility can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Prudential Utility will offset losses from the drop in Prudential Utility's long position.

The idea behind Exelon and Prudential Utility Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.